Indian cos lack corporate responsibility strategy

NEW DELHI, INDIA: Most Indian firms do not have clarity in choosing projects related to social welfare as 84 of the top 100 listed firms don't have well defined strategy, a survey by audit and tax advisory firm KPMG revealed.

Apart from indicating that corporate reporting is nascent among leading Indian firms, this statistic also implies that companies may have minimal clarity when it comes to choosing projects to be involved in, according to KPMG India Corporate Responsibility Survey 2011.

Only 16 percent of the top 100 listed firms in India have clarity in corporate social responsibility as against 73 percent of the world's 250 largest firms.

"Most companies start with a 'me too' approach with a focus on developing a good enough report," Arvind Sharma, director, advisory-climate change and sustainability services at KPMG in India, said in the report.

"But during the journey, many realise the benefits of embedding sustainability in terms of managing stakeholder expectations, finding alternative solutions to raw materials and fuels, designing benign products and services, and so on. Many realise the business case for sustainability during the process," he said.

Of the 100 top-listed firms surveyed, only 31 per cent publicly reported their corporate social responsibility performance while only a quarter have systems to measure, monitor and report on such issues.

In comparison, 73 per cent of the world's 250 largest firms revenue-wise define objectives, 65 percent have key performance indicators related to set objectives and around 60 per cent report on such identified indicators, the KPMG survey said.

Corporate social responsibility issues have gained significant importance in the recent times, especially in light of greater expectations from stakeholders on responsibilities, ethical scams in recent times and emerging national and international legislations on corporate responsibility issues.

The survey reveals that only 15 percent of the top 100 firms have managed to integrate corporate responsibility in to their governance framework and only eight percent have managed to embed corporate responsibility into their risk management framework.